Court dismissed claim that import ban on powder milk violated property rights under Article 23 of the Constitution.

[*268] 1976 July 30

(STYLIANIDES, P.D.C., & ARTEMIDES, D.J. )

IN THE DISTRICT COURT OF NICOSIA

Pantelis Charalambides,

Plaintiff,

and

The Republic of Cyprus, through

The Attorney-General of the Republic,

Defendant.

(Action No. 3030/71).

Right to property - Article 23 of the Constitution - Order limiting and regulating importation of powder milk - Made under section 3 of the Imports (Regulation) Law, 1962 (Law 49 of 1962 as amended by Law 7 of 1967) - It regulates the exercise of a profession or trade, which is a perfectly lawful cause, based on Article 25 of the Constitution - It does not amount to such restrictions or limitations which materially decrease the value of plaintiff's property within the provisions of Article 23.3 of the Constitution.

A. Eftychiou, for the Plaintiff.

R. Gavrielides, Counsel of the Republic for the Defendant.

JUDGMENT

The judgment of the Court was delivered by:-

ARTBMIDES.

D. J. By this action [*269] the plaintiff claims against the defendant, the Republic through the Attorney-General, compensation for over £5,000.- for damages incurred to him due to the prohibition by law and or order wholly or partly of the importation and use in Cyprus for industrial purposes of powder milk.

The defendant in his statement of defence contended that this Court had no jurisdiction to entertain this action as it falls within the ambit of Article l46 of the Constitution.

At the commencement of the hearing both counsel invited the Court to determine the following points under 0.27 R. 1 as these two points would dispose the whole action:

1. Does this Court have jurisdiction to entertain this action or is it within the exclusive original jurisdiction of the Supreme Court under Article 146 of the Constitution?

2. Does this action fall within the ambit of Article 23 of the Constitution or Article 25 and if it falls within Article 25 is the plaintiff entitled to any damages or not?

In the course of the addresses of counsel on the aforesaid points it was revealed that there were disputes as to facts and we ruled that we could not proceed under 0.27 R.1 and instead we directed that the issue of liability be heard first and if determined in favour of the plaintiff then to proceed to hear evidence [*270] on the quantum of damages. Though this procedure is not unusually followed, yet in the present case we considered that it was desirable.

Counsel for the plaintiff bases his claim on Article 23 of the Constitution and alternatively on Article 172 in that he alleges that the plaintiff hassuffered damages from a wrongful act of the officers or authorities of the Republic committed in the exercisecf their duties.

Before proceeding to deal with the factualaspect of the case we propose to advert on the lawapplicable on the issues before us and state facts which are common ground between the litigants.

On 24 May, 1968, the Minister of Commerce and Industry issued

an Order, published in the official gazette (see part III, No. 327), by which the importation of various goods has been limited

and regulated. Section 3of the said Order reads as follows:

###

There then follow two provisos which read:

###[*271]

###

In the first schedule of the Order milk andcream of milk, with certain exceptions not relevant inthe present case, are included and their importationis therefore subject to a permit first obtained fromthe Minister of Commerce and Industry.

The aforecited Order was issued by the Ministerpursuant to section 3 of law 49/62 (Regulation of ImportsLaw), as amended by section 2 of Law 7/67, which readsas follows

###

Counsel for the plaintiff does not attack the constitutionality of the relevant Order issued by the Minister, and of course he could not do so in this Court which lacks jurisdiction to entertain such an issue if raised, but claims that the plaintiff is entitled to be paid compensation pursuant to the provisions of [*272] Article

23 of the Constitution, the material parts of which read as follows:

"1. Every person, alone or jointly with others, has the right to acquire,own, possess, enjoy or dispose of any movable or immovable property and has the right to respect for such right.”

“The right of the Republic to underground water,minerals and antiquities is reserved.”

”2. No deprivation or restriction or limitation of any such right shall be made except as provided in this Article.”

"3. Restrictions or limitations which are absolutely necessary in the interest of the public safety or the public health or the public morals or the town and country planning or the development and utilization of any property to the promotion of the public benefit or for the protection of the rights of others may be imposed by law on the exercise of such right.”

“Just compensation shall be promptly paid for any such restrictions or limitations which materially decrease the economic value of such property; such compensation to be determined in case of disagreement by a civil Court".

We now turn to examine the facts of this case and see whether the plaintiff can bring his case[*273] within tie ambit of the provisions of Article 23 of the Constitution.

The plaintiff was the owner of an industry, of very small scale, of ice-cream. In the preparation of hio ice-cream he used debutterised milk powder imported from abroad. In 1968 the relevant Order was published, cited to above, by which the importation of the stuff used by the plaintiff in the making of his ice-cream was not permitted, unless a relevant permit was issued in this respect by the Minister. The plaintiff applied for such a permit for 5 tons of debutterised milk powder, but the Ministry replied to him on 10.2.1971, that it would be a necessary prerequisite for the issuing of such a permit that the plaintiff should have first contracted with the Commission of Cyprus Milk and Dairy Industries for the supply to him of fresh cow milk, so that the possibility of allowing him to import a proportionate percentage of milk powder would be examined. On 15.4.1971 a letter was addressed to the Ministry by plaintiff’s advocate requesting certain information and on 5.5.1971 the Ministry reiterated the contents of its letter of the 10.2.1971 adding that the purpose of the order was to ensure that a certain quantity of fresh milk had been acquired by the Commission of Milk and Dairy Industries and thus boost the local production of fresh milk.

It is to be gathered from the above that the Ministry had never turned down an application by the plaintiff for the import of milk powder but asked him [*274] to fulfil certain prerequisites before examining his application, which the plaintiff, as we understand did not fulfil.

The allegation put forward by the plaintiff, in order to bring his claim within the compass of Article 23 of the Constitution, is that the equipment of his ice-cream industry is specially adapted for the making of ice-cream from milk powder and not from fresh milk. If fresh milk was used in them the ice-cream produced was not of merchantable quality. Thus and as a result of the relevant Order his equipment became useless and hence his claim for compensation.

We shall have more to say on the above allegation of the plaintiff when we shall be dealing with the evidence adduced on the matter; right now, however, we shall proceed to examine whether and if the plaintiff's allegations had been substantiated, he has succeded in law to bring his case within the provisions of Article 23.

Article 23, has been considered since very early of the coming into operation of our Constitution and this is understandable since it deals with the right of the citizen to possess and enjoy property and in what circumstances and on what conditions this right may be curtailed or regulated. The authorities begin with the case of The Holy See of Kitium of Limassol and The Municipal Council of Limassol 1 R.S.C.C. 15, where the then Constitutional Court held that in the [*275] cases where a building permit is applied for it is a question of fact and of degree, depending upon the circumstances of the particular case, whether the decision of the appropriate authority thereon amounts to a "deprivation" which can only be achieved under paragraph 4 of Article 23, or whether it amounts to “restriction or limitation" which can only be imposed under paragraph 3 of the said Article. This case was followed and applied in Hussein Ramadan and 1. The Electricity Authority of Cyprus, 2. The

Republic of Cyprus , through the District Officer of Limassol,1 R.S.C.C. 49, Phedias Kyriakides and The Republic of Cyprus, through the

Minister of Interior,1 R.S.C.C. 66 and later on in Nicos Kirzis and

2 Others and The Republic of Cyprus, through 1. The District Officer of Limassol, 2. The Limassol District Lands Officer (A.G.) 1965 C.L,R. part 3, 46 where Munir J. said the following at page 60.

"This issue of whether or not compensation is payable under paragraph 3 of Article 23, depends on the question of fact whether or not the 'restrictions or limitations' in this case have been such as to give rise to the right of compensation under paragraph 3 of Article 23..........................".

In Demetrios Thymopoullos and Others and The Municipal Committee of Nicosia

(1967) C.I.R. Part 3 p. 588, Triantafyllides, J., and he then was, held that in the circumstances of that case the extent to which the properties of the Applicants were affected by the sub judice street - widening scheme resulted in the [*276] imposition of restrictions or limitations within the ambit of paragraph 3 of Article 23.

Reverting now to the facts of the case in hand, what restrictions or limitations have been imposed in the enjoyment or possession of plaintiffs ice-cream equipment by the Order of the Minister of Commerce and Industry in the sense of Article 23 of the Constitution? After reviewing the authorities cited to above the answer to this question is "none". The relevant Order does not in any way affect the machinery of the plaintiff. It merely regulates the import of certain goods, the importation of which is not prohibited but is subject to the prerequisite of the obtaining of a permit in this respect. The Order in effect regulates the exercise of a profession or trade, a perfectly lawful cause, based on Article 25 of the Constitution. We are therefore of the view that the plaintiff has failed to bring his claim within the provisions of Article 23 of the Constitution.

As we have said earlier the plaintiff relies also on Article 172 of the Constitution. This Article is cited in the general endorsement and the statement of claim, but counsel for the plaintiff has not said a word about this in his address and we take it that impliedly he has abandoned it. If we are correct in our surmise, that counsel has done very wisely because Article 172 has no bearing on his case at all. It simply provides that "the Republic shall be liable for any wrongful act or omission causing damage committed [*277] in the exercise or purported exercise of the duties of officers or authorities of the Republic". It has been judicially held that the acts or omissions envisaged by Article 172 do not include administrative acts, and in the present case the refusal, if there was ever a refusal, of the Ministry to issue the plaintiff with a permit to import powder milk amounts to an administrative act or decision. (See: Eleni Vrahimi and Another and The Republic through The Attorney-Genera1, 4 R.S.C.C. 121).

We now proceed to examine whether on the evidence adduced the plaintiff has succeeded in proving his allegations i.e., whether his equipment became useless because it was specially adopted for the production of ice-cream from milk powder. We must observe now that the plaintiff himself has not given evidence. Be that as it is, however, the plaintiff has called two witnesses professing to be "experts" on the ice-cream production business. The first witness Kyriakos Vasiliou (P.W.l) is 28 years old. He said that since his childhood he was making ice-cream which at the beginning he was selling by peddling. Recent ly he had established an ice-cream factory in Famagusta. He does not have any academid qualifications and his education seems to be that of the elementary school but he knows how ice-cream is made and from the evidence before us this is not a difficult thing to do. He has described to us the procedure for the preparation of ice-cream and the essence of his evidence is that icecream made of fresh milk is of superior quality than ice-cream made of milk powder. He went to the "factory" [*278] of the plaintiff where he carried out a test with his equipment for the making of ice-cream from fresh milk and milk powder. He succeeded in both tests but he said that he needed more time and care in the preparation of ice-cream with fresh milk in view of the fact that fresh milk needs careful attention whilst being boiled in that germs are created in it within a short while from its supply. He further said and this is the important part of his evidence, that the plaintiff's equipment was fit for the preparation of ice-cream with both fresh milk and powder milk because there is no difference in the preparation procedure, the method used or the equipment.

Charalambos Constantinou, P.W. 2, was the second witness for the plaintiff. He said that he is 64 years old and his trade is the making of "cateifi". In fact, and according to his evidence, he is the inventor of the first machine for the making of "cateifi". At the beginning of his career he was making ice-cream but he stopped since 1950. He also visited the equipment of the plaintiff which he has described. He agrees substantially with P.W.l and added that there is no difference in the making of ice-cream with fresh milk or fresh milk mixed with powder milk.

The defendant called one witness i.e. Georghios Protopapas the main shareholder and director of the well known company "Regis Milk Industries Ltd.". This company owns a big factory for the production of ice-cream and was established 25 years and since then Mr. Protopapas has been its director. He visited the factory of [*279] the

plaintiff in 1974 on instructions from the Ministry of Commerce and Industry and saw there only old equipment. The plaintiff told him that he had abandoned the ice-cream business and was engaged in the making of "cateifi". Mr.

Protonpapas in a lucid and coherent way explained to us the whole procedure for the making of ice-cream. The gist of his evidence is that

he disagrees with the witnesses called by the plaintiff that ice-cream made from powder milk is inferior in quality from ice-cream made of fresh milk for the simple reason

that the powder milk is nothing else than milk in a powder state which can be reconstituted into fresh milk simply by diluting it into water. When the powder milk is reconstituted it becomes again milk with all the constituents of

milk. He further said that for this reason there are no machines for the

preparation of ice-cream that can work only with powder milk and not fresh milk. This would have been absurd in view of the fact that milk

and reconstituted milk is the same thing. With regard to the quality of ice-cream whether made with fresh milk or reconstituted milk, this depends on many factors such as, the equipment used, the other ingredients put into the cream and naturally the experience in the business.

From the evidence adduced we prefer of course the evidence of Mr. Protopapas for obvious reasons. He is the founder and director of a large scale business concern in the making of ice-cream and his knowledge and experience in the matter cannot be compared with that of the witnesses for the plaintiff. But even the [*280] witnesses for the plaintiff, as we have summarised their evidence earlier, did not help at all his case but on the contrary they have added to the case for the defendant.

In our judgment the plaintiff has failed completely to substantiate his allegation that his equipment became useless because he could not use in them fresh milk to produce ice-cream. Such an allegation has been proved by the evidence to be totally unfounded. For the reasons we have endeavoured to explain the plaintiff’s action is dismissed with costs.

Action dismissed with

costs.